Economics & New Political Structure
By Shahid Javed Burki

I don’t often write about politics but on some occasions it is a subject that becomes difficult to ignore even for a person whose primary interest is economics. The present is one such moment. There cannot be any doubt that what is unfolding at this time is a unique event in Pakistan’s history.
It is unique since, for the first time in the country’s troubled experience, highly centralized power is yielding some of the space it occupies to other players. And this is happening without much violence.
The Pakistani street is a participant in current events but it has eschewed the use of power to confront those who have the formal authority to use it. The dynamics that is now working will proceed and a new political structure will evolve. This will have enormous consequences for the country’s economic future.
I see four trends at this time, each of which will have a significant economic impact. They are: the emergence of new players in the game of politics, de-concentration of power from the center to the governments at the lower level, the willingness on the part of many to confront those who believe that they have the right to impose their religious beliefs on society, and the reshaping of relations with the outside world.
Once the current electoral cycle is over, there is no doubt that Pakistan will have a new political structure. The concentration of power in the hands of General Pervez Musharraf will yield to greater disbursement as new claimants seek space for themselves in the political system. Most of the new challengers will have broad support from the public. The Supreme Court will continue to assert its newly gained power. As it does this other institutions of the legal system will find reason for checking the power of the executive.
Civil society will exert itself and influence not only those who wield power but also those who influence it. The media — both print and electronic — will champion various causes popular with the segments of society it would want to cultivate for both ideological and business reasons.
Islamabad will lose some of the authority it currently enjoys. It will have to share power with governments at the sub-national levels. Following the elections to the national and provincial assemblies, the interests of the provinces will inevitably diverge from those of the center. Pakistan, with a population of 165 million, cannot be governed from Islamabad as has been the case for decades. Some of the services the government must deliver can be provided efficiently and effectively only when those providing them are close to the people and accountable to them.
When the history of the first Musharraf period (1999-2007) is written, what will be applauded is the decentralization of power to the local governments. This devolution is being resisted by those who stand to lose if power devolves to the local representatives of the people.
Among those in opposition to this trend are the provinces who don’t want to lose the authority they are acquiring from Islamabad. Some political parties are also not keen to develop the new system since they are as centralized in their structure as the current apparatus of the government.
The issue of the role of religion in politics and in the way society functions has been contentious ever since the country gained independence.
The question the citizenry must answer is relatively simple: should those who believe that only they know how to interpret Islam for the rest of society have the license to impose their will? The answer is as simple as the question itself.
A society must be guided by the laws it devises and not by someone else’s narrow interpretation of what the Almighty wants.
And then there is the question of Pakistan’s relations with the countries in its neighborhood as well as the larger powers. Foreign relations in the past were guided by three considerations: the perceived need to balance the power of India, the need for foreign capital for augmenting the low rates of domestic savings and support for the Muslim world. Will a more dispersed political system continue to view foreign relations from these three angles?
Having pursued an India-centric foreign policy, some among Pakistan’s current political elite, including President Pervez Musharraf, have begun to see the wisdom of benefiting from India’s economic size. With this recognition will come a significant reorientation of foreign policy. Pakistan has, at times, followed America’s strategic interests rather than its own for the simple reason that it has been economically very dependent on Washington. That dependence has declined because of the restructuring of capital flows into the country. This too should lead to change in the direction of foreign affairs.
Then there is the question of Pakistan’s relations with the Muslim world. In this area, the policymakers were guided more by emotions than by the country’s strategic interests. Pakistan, more than most Muslim countries, has unquestionably supported the Palestinian cause. Its championship has been more vocal than that of some of the Arab countries. Even when the late Yasser Arafat failed to support Pakistan on Kashmir, Pakistan’s commitment to the Palestinians did not flag.
The time has come to weigh relations with the Muslim world from the perspective of Pakistan’s national interest rather than on the basis of romantic notions about the Muslim Ummah. Under President Musharraf not enough attention was given by Islamabad to craft the country’s economic strategy in light of political and foreign policy imperatives. The general did well to leave the management of the economy to a group of professionals. The professionals, however, were either not inclined or were not able to strategize on developing an economy that would serve all segments of the population. The result of this approach was that while a decent level of growth was achieved in the gross domestic product, it failed to address a number of problems.
Among these is the continued dependence of the economy on external capital flows and the reliance on a few capital-intensive sectors for producing growth. This approach, in turn, has failed to deal with the high incidence of poverty, low level of human development, continuing economic and social backwardness of women, increasing disparity in income and in the development of different provinces.
Practically no attention has been paid to the development of the institutions that would support growth and alleviate poverty over the long term.
Property rights are not fully protected and the legal structure does not provide protection to investors and consumers. The government has neglected large cities which continue to function without the adequate provision of basic services particularly to the poorer segments of the population.
Islamabad has also failed to develop an export sector that could have taken advantage of some remarkable developments in the global economy. In some areas, the failures outweigh the successes.
With a new political structure evolving, this is a good time to turn the state’s attention towards these economic problems. (Courtesy Dawn)




Editor: Akhtar M. Faruqui
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